In July, we expect the announcement of the four following major renewable energy initiatives: 1) expansion of small-scale solar power plant installations (including agricultural and home solar power installations); 2) large-scale offshore wind power and solar power complex projects (via government agencies and green finance schemes); 3) the proposal of new resident-friendly policy measures and the beefing up of existing related policies; and 4) improvements to the Renewable Energy Certificate (REC) program.

We suggest taking a selective approach when selecting out renewable energy players for investment. With Korea, EU countries, and several other countries promoting initiatives aimed at strengthening and expanding the renewable energy industry as part of their post-covid-19 era policy plans, the valuations of related companies are primed to rise rapidly. But, we caution against simply choosing investment targets based upon high expectations for policy benefits alone. Rather, taking into consideration the timing of actual policy implementation, we advise selectively investing in companies that are not only to enjoy government policy support, but are also set to display further stable top-line growth in line with ongoing export expansion. We prefer Hanwha Solutions amongst solar industry players and CS Wind amongst wind power industry players.